>> and now it is getting weird. they have not even arrived at the white house we are told and this is the point where the president of the united states said i want you to come in here congressional leaders to come and harb out the budget impasse and find a way to solve 11:00 eastern time was the time in which they were to arrive including mitch mcconle and speaker boehner of the u.s. house of representatives and he broke off talks with the president . what is that when you show up late with the meeting. oh, is it 11:00? i thought it was noon?

we are also told that the president witched the venue from the oval office to the cabinet room and turned off the air conditioning. no, i made that up. it is getting weirder and weirder. who is better at understanding the dynamics that building who is wendall. what can we expect of the powwow? >> the president and we are not sure that the participants haven't arrived yet. but the pool of reporters that take pictures in the start of the meeting weren't invited in the meeting yet. the president instructed them to come here with plan or plans to extend the debt ceiling for 2012 to 13. it must last until 2013. house peeker john boehner aids

said he's coming here with the demand that spending be cut more than the debt ceiling is raised. that is his only bottom line. it would take in the range of 2.4 trillion to extend the debt sealing through 2013 and the democrats and republicans were no where near that when boehner walked out of the talks for the second time. boehner had wanted to raise the debt ceiling to next spring and the president said the fight is not going to get easier with the 2012 campaign in full swing. republicans don't want the fight to get easier. boehner's spokesman said it is unfortunate for the debt ceiling to be increased because the time table is not ideal for a presidential campaign. >> are they so far apart and especially after the president's tone and remarks last night, that they are

angry at each other? >> well, both sides would say they are not. both the president and speaker boehner said the talks have been civil, but there seem to be a little emotion in both of them especially the president yesterday. boehner said he gave up when the president demanded 400 billion in additional revenue on top of the 800 billion they agreed on . like negotiating with a bowl of jello. officials concede that mr. obama asked for the additional revenue and did so after the gang of six agreed on a two trillion dollar increased revenue figure and that got support from the number three republican in the senate. lamar alexander and the president feels that any plan to cut the deficit has to be bipartisan anyway and six the gang of six plan got support

from republicans, why should he give tea party republicans in the house when they won't vote to raise the debt ceiling under any circumstances. the president's red line was boehner's push to basically undo the health care reform if the debate over spending fell down. >> what a mess. buddy, what a mess. >> wendalgoalary at the white house. one of the folks who wants to take his job. default right now, it is eventually going to happen and things will be a lot worse. texas congressman ron paul. congressman, a default has all of these horrific images and fears attached to it over done or what? >> i think there are a lot of big problems and we can't ignore it. but the biggest problem is not

admit that this country is bankrupt. if you don't admit the true problem you will have the bickering back and forth and will not come up with the answer. when country the size of ours gets to bankruptcy the debt gets default on . adam myth would argue this case . only two ways to default, one through the deflationary process where the debt is lequidating and the other by debasing the currency. it is easier to debase the currency and have the debt liquidated in real terps than allow the bankruptcies to come. we didn't permit the bankruptcies four years ago and the problems got worse and our debt exploded. there are terrible choices and the worse choice is pretending that the bankruptcy is not before us and we don't have to admit the seriousness .

problem and address it >> i am amazed at congressman how we sustained the triple a rating for the years. >> who gave it to us? they gave ratings to fannie mae and freddie mac. >> very good point. >> they warn us about the disaster coming, no much? look at the free market economist to get the rating. >> that is like me offering dietary advice. >> get your sense was what happened august 2nd. to hear the president tell us we default. but technically that is not true. >> no, you pay your bills with the cash flow and pick and choose. you don't default on the debt. you might have to default on the agencies of government. but you could pay your social security and you could pay the necessary things that have to be done, but there is a lot of burrcrats that are not all that necessary . so there is a lot of -- you

can could do. facing up to the facts that you have to deal with it and end up spending money and august 2nd is a fictitious day. they are billions over the debt already. and so, i think that august 2nd debt is more related to the individuals who have trips planned in august and want to clean up the mess . for that reason, if they don't come up with a agreement. they will have a temporary agreement that the president doesn' want . when push come to shove. agreements and agreements and agreements . so that will happen because they scared enough people. >> absolutely. >> and you return to a continuing resolution . you know what, interest to point out manage i long suspected that the dema goging the issue of the debt limit and horrendous things that happened and never mind the fact that dozens of times in

the past we have and only revisited the same problem that is brought us to the abyss . a growing chor ousof folks that are seeing this thing. one poll had you almost tide with barack obama. there might be a sense here, that you are on to something and not on something. >> obviously. we are on to manage and called the american tradition and not that i have anything brand new. but trying to revive self repliance and sound mon yea sensible foreign policy and balancing a budget and living in our means. but because the country is in bad shape they are looking well with us. the reason i do well with independents and democrats, i work with them on transpartnerency and foreign policy that is different.

monetary policy where we just don't print money when we need it . seriously talking about a balanced budget. that has an appeal as well as civil liberties. most conservatives give lip service and liberals do as well but people have had their liberties violated when you think of the patriot act. >> i agree with you. >> i don't want to go to those issues if you don't mind. but i want to raise a concern on the budget impasse and the president's performance last night it was like a rod surly moment. it was bizarre . congressman if you don't get fox business you should demand. one of the themes that came up. how angry and disappointed he was for republicans for bringing us to the brink. if there was a demand on the part of the president as essentially saying get in here and i want to talk to you guys and settle it, would you go?

>> no, i would be annoyed. i was annoyed at him and instructing boehner and congressional leaders that you get up here at 11:00. it will be interesting to see if they weren't there at 11:00. sometimes you can make the case since the congress is in charge of the purse f. the president wanted to ing people together. mr. boehner can i come over and visit with you . i would like to talk it over with you. that would be a gracious way of dealing with the problem rather than shouting and blaming each other and instructing the leaders of congress. i don't like a very, very powerful presidency. i am not in the campaign for that purpose. i think the congress should express themselves more and more responsibly. more responsibility is on the congress. i would treat it quite differently than the attitude of the president that he is currently doing. >> thank you, congressman.

thank you very much. >> we are hearing they have indeed arrived for the meeting . i am sorry. what are we going to show you. >> ronald, ronald reagan. thru go again. >> and suddenly president obama's hero is ronald reagan. time and again suppressed for a debt deal. i wonder what art laper . first images from inside of the white house. i screwed things up for my producers. we know that the meeting was started. they made themselves invisible. man 1: send, that is the weekend. app grapgic: yeah dawg! man 2: allow me to crack...the bubbly! man 1: don't mind if i doozy. man 3: is a gentleman with a brostache invited over to this party? man 1: only if he's ready to rock!

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>> the microphones didn't catch them and they went in another entrance. underground tunnels and the like. some viewers took me literally when i said they made

themselves invisible. that is not the case. i was joking. only a couple in congress can make themselves invisible. >> in the cabinet room and not the oval office. the president turned off the air conditioner. again i am kidding. we'll get the at the same times of the president and we'll it live to you. it will be a couple of minutes old and see the body language and how they are getting along and whether they brought spit balls and the like. art knows a thing or two about how ronald reagan would tackle the problem. he is the former economic advisor. i suspect knowing the president and all of the speeches as i do, he wouldn't have done what the president did last night.

>> i don't know. i would have guessed ronald reagan would not have agreed to raise tax rates and get the debt ceil john boehner is familiaring reagan than obama is. yes the debt ceiling should be raised but this is not the time to do tax policy changes. it is time to getet debt ceiling raise raising tax cuts is not the thing . i wouldn't agree if i were boehner. >> if you were speaker boehner would you have gone to the white house as he did today after the president's nasty comments last night. >> yes, it is cool to the white house . you never know if there is not a change of mind or heart. you always leave yourself open for a good negotiation and a

good correct change on the president's part. but i wouldn't agree with something that has a tax rate incroses . boehner is correct in not agreeing to it. i talk to the president and harry reid and nancy pelosi and mitch mcconnell. >> i think it is different than when ronald reagan would have bamentses with tip o'neil. >> we just got the tape n and you can see john boehner to the left and harry reid to the right. >> whata do you make of the fact he is there. >> i don't know. the personal stuff that i hear said by obama is very, very poor taste and surely not a way to do negotiations and that's not the way to do business . he is playing politics to be honest with you . talk about catastrophic and end of the world and major recession and downgrades, all of that is nonsense.

and how did president reagan handle that with tip o'neil. i don't remember president reagan pelaring tim. >> no. he didn't. >> and so that was. >> no, it is different. but there were times when reagan would make funny jokes about tip o'neil. the deficit is like tip o'neil big and fat and out of control. it was never personal and never in the sense they are doing today. >> where did this go? the president is saying that we don't have a dole by august 2nd we are defaulting. >> no, we are not defaulting. everyone knows it is raised. all of the checks will be paid and everyone will be paid . frankly the issue of the budget deficit and government spending and all of that. we have plenty of time and not that we shouldn't have done it

sooner than later. the u.s. is not greece or portugal and the way of basing the tax rate increases and changes in obama care should be handled in the election. this is november 2012 issue. i would like to see a short term debt deal and let it be fought out in election time. that's where the voters make the choice . the end game is november 2012 and obama is playing it poorly and poll numbers are showing he's not getting advantage out of being mean and nasty and holding the u.s. hostage. this is not to his political advantage either. >> art, thank you. and we'll make a deal fast or deal with it yourself. lawmakers telling them to raise the debt ceiling right now.

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>> the pictures say it all, doesn't it. many of you are not familiar that besides an economic guru and look at peeker boehner sipping a cup of tea next to the president of the united states. you do that next to the president of the united states. i noticed, you decide. powerful stuff. it could be dismissing body language and again, it is one of my areas of expertis and suffice to say the speaker likes the tea more than the president of the united states. we'll go frame by frame.

>> the president could avoke and envoking the 14th amendment and raising the debt limit. >> i don't know. i think the worst thing to happen is tefault and the 14th amendment is something that the president needs to do and certainly clear to me that's what he needs to do and simply said that the public debt shall not be questioned. bill clinton thought he should do it. >> a move like that would purgreater constitutional, the time for that has come and gone. >> i would have preferred it to be done a week or two ago. i think it can be done. i agree with grove and norquist who said raise the debt now. fight it out in 2012.

i feel sorry for john boehner and i think he is a captive of the conference and a lot of newer people. >> why do you feel sorry for john boehner. why not the president. who is captive of whom here? >> i feel sorry for our country, frankly neal, people send us to washington to try to figure out problems and i am one who believes in a sensible center and i think we don't need to move too far to the right or left. >> congressman. maybe people are tired of the way it is played out. it was democrats who voted against the debt limit when president bush was president . part of the theater. both parties do it . so that was then and this is now . now all of the sudden concerned about financial armageddon andiadiada. we have done it 18 times when ronald reagan was president and we are still in the same

pickle. maybe americans are saying that dog don't hunt. >> i think what president obama was trying to do and i don't know the detail of the package. i think he thought because the pressure was on it might be a chance to bring people together and try to negotiate cuts. the way they really do it. one side no revenue enhances at all . the other side. no cuts in programs at all . the truth is, you have to have both. cut in programs and cuts in spending and those. why would you pay more for a lousy product? do you walk in a autoshow room and they say look at this beautiful lemon. it will cost you extra. why would anyone entertain pay more for the product. why not first address the

product that is bloated out of the control and cost too much as it is. >> there is a lot of program that is middle class people depend on. social security, and medicare and medicaid. >> it is not a life or death issue. half of the people in the country don't pay taxs and few percent in the top rate pay more to pay more for those who don't. how is that fair or right or human or decent? >> i am saying programs that people rely on like medicare and medicaid . social security. >> can they be scaled back and addressed and can their growth to cost be addressed? >> i think everything has to be on the table, yes. >> do that first before you consider chargingly more for the product. no, we want to get the revenue thing in there right away. that takes the discipline away to address the cost. >> because there is a lot of

people in my opinion that are not paying their fair share. >> there are more than half . people who are not paying at all. let alone the ones that are not -- they might think to differ. but they pay nothing. >> of course those people would love to charge more to the government and more to the people who they think are well off to continue sucking off of the government. but let's call a spade a paid here, congressman. >> the bush tax cuts, you know helped millionaires and billionaires, god bless them. >> you are a wonderful guy. but when do you let go of george bush? 50 years from now. is he still going to be sort of the darth vader. when do you let go? >> the republicans beat up on bill clinton a lot. i hardly think we are beating occupy george bush. george bush has come and gone as president. but we have to live based on

what he put n and i think those tax cuts are unconscoinable. that debt doubled since this president came n >> he inherited a terrible economy. neal let me tell you. >> for six years republicans could have passed down amendmentings. >> you could passed a budget last year, congressman. democrats were totally in control. why didn't you. there is enough blame to go around. i want you to forget george bush and forget george bush and move on. i think it is an issue for you guys and you just have to move on. >> i want to move on and by moving on, there has to be shared sacrifices and not just senior citizens and working people. >> congressman.